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This is a ten question multiple-choice quiz covering the material in this Unit. I hope you do well!

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Question 1 of 10

1. Question

10 points

If one event follows the other, we can automatically conclude that the other must have caused the one.

he above statement is an example of the fallacy of cause and effect

The above statement is an example of the fallacy of composition.

The above statement is an example of a nominally positive statement.

The above statement is a correct application of the law of increasing marginal costs.

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Question 2 of 10

2. Question

10 points

According to our text, economic growth is caused by:

advancements in technology and increases in resources.

an increase in a country's macro economic demand.

an increase in a country's money supply.

all of the listed choices are correct.

Correct

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Question 3 of 10

3. Question

10 points

The simple circular flow model provides:

A simplified illustration of the economic interactions between households and businesses.

A model of how money flows between our country and foreign countries.

A model of how our government spends and receives its funds.

A simplified illustration of the economic interactions between all businesses in a country.

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Question 4 of 10

4. Question

10 points

A pure capitalist economy is an economy in which:

Economics decisions are made by private sector and the role of the government is limited to essential functions, such as defense, providing a legal system and providing public goods.

There is no government presence.

The government makes all decisions regarding prices and wages.

The businesses and the stock markets are run by private individuals, but all other economic decisions, including consumer and labor laws and banking pricing and regulations, are made by the government.

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Question 5 of 10

5. Question

10 points

What does it mean for a country if it is currently producing at a point beyond (to the right of) the production possibilities curve?

By definition, it is NOT possible for a country to produce at a point beyond its production possibilities curve.

The country is using its technology as efficiently as possible.

The country is experiencing unemployment and inefficiency.

It is possible to achieve a production combination outside of the curve, but if and only if total government spending in the economy increases.

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Question 6 of 10

6. Question

10 points

Which of the following is an example of a normative economic statement?

We should increase taxes in order to reduce the national debt.

When we increase taxes, the national debt decreases.

When we decrease the national debt, the economy will grow.

The national debt increased last year.

Correct

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Question 7 of 10

7. Question

10 points

When it comes to critical thinking, all of the following are important questions to consider when analyzing economic information, except:

Question the number of variables.

Question how the variables are defined.

Question the assumptions.

Question the source.

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Question 8 of 10

8. Question

10 points

When a country’s government imposes a tariff (import tax) on foreign cars, then it benefits this country’s car manufacturers. Therefore, it benefits its entire economy.
This statement is:

an example of the fallacy of composition

an example of the fallacy of cause and effect

a correct application of the law of demand and supply

a nominal statement

Correct

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Question 9 of 10

9. Question

10 points

Let’s assume that a country is operating on the production possibilities curve. Without a shift in the curve, in order to get more of one good, what must happen?

The country must produce less of another good.

The country must produce more of another good.

The country must eliminate unemployment.

It is impossible to get more of one good when you are producing on the curve.

Correct

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Question 10 of 10

10. Question

10 points

Let’s suppose that in year 1 average incomes in the economy equal $30,000. The following year (year 2), average incomes rise to $33,000 (a ten percent increase). Let’s suppose that prices (inflation) from year 1 to year 2 rise by twelve percent. From year 1 to year 2: